Fresh off the Trump administration’s failed attempt to indict her on mortgage fraud allegations, New York Attorney General Letitia James is back in court—but this time, she’s suing the White House.
On Jan. 8, James joined the attorneys general from California, Colorado, Illinois, and Minnesota in filing suit in New York’s Southern District, seeking to block the Trump administration from freezing roughly $10 billion in federal funding for social assistance and child care programs.
The lawsuit targets the administration’s decision to halt funding after a sweeping probe into alleged fraud in Minnesota. In their suit, the states argue that the proposed cuts violate federal law governing aid programs—and, perhaps more notably, lack any credible evidence.
ABC Learning Center Director Ahmed Hasan stands in the infant room at his daycare center in Minneapolis on Dec. 31, 2025.
According to the Democratic attorneys general, the administration has offered no “legitimate justification” for the freeze and has failed to provide documentation supporting its fraud claims. They also said the move appears to be more about punishing blue states than about protecting taxpayer dollars.
“Defendants have no statutory or constitutional authority to do this,” the complaint states. “Nor do they have any justification for this action beyond a desire to punish Plaintiff States for their political leadership. The action is thus clearly unlawful many times over.”
The states are also asking the court to block what they describe as an extraordinarily broad document demand, which would require them to turn over years of records—including personally identifiable information—within just 14 days.
“It’s unlawful, and it’s also petty,” California Attorney General Rob Bonta told Politico, accusing the administration of singling out blue states without evidence. “They have not one shred, not one shred of evidence.”
The case marks the latest escalation in an ongoing legal war between Democratic attorneys general and the Trump administration, which has repeatedly attempted to freeze or restrict federal funding.
The clash carries added weight given James’ recent history with Trump. Last month, a grand jury declined to pursue charges stemming from a mortgage fraud investigation, which James called “baseless” and part of an “unchecked weaponization of our justice system.”
Now, she’s leading the charge against another abuse of executive power.
At the center of the dispute is the Department of Health and Human Services’ decision on Tuesday to cut off funding, citing vague concerns about misuse. The freeze includes nearly $7.4 billion in Temporary Assistance for Needy Families funding, nearly $2.4 billion in Child Care and Development Fund funding, and roughly $870 million in Social Services Block Grant funding.
New York Gov. Kathy Hochul
“The importance of these programs cannot be overstated,” the lawsuit says. “Without these programs, there will be immediate and devastating impacts.”
States were told that payments would resume only after submitting extensive documentation as part of HHS’ expanded “Defend the Spend” review system. The department has also indicated that it’s examining whether benefits were improperly provided to ineligible immigrants.
The move follows the Trump administration’s decision days earlier to pause child care funding in Minnesota amid a growing federal fraud investigation.
New York Gov. Kathy Hochul previewed the legal fight earlier this week.
“This is a fight we’re going to have to take on,” she said, adding that children “should not be political pawns in a fight that Donald Trump seems to have with blue-state governors.”
For now, blue states are once again turning to the courts—led by an attorney general whom Trump has repeatedly tried, and failed, to sideline.
